Mittal confident of deal by June

None | ByVijay Dutt, London
Apr 20, 2006 07:29 PM IST

However, Mittal is wary of the obstacles Arcelor?s management is confronting him with, writes Vijay Dutt.

Notwithstanding fear that Luxembourg’s government would seek to scupper his £13 billion bid for Arcelor by enacting new laws that would require his company to pay for the offer  in cash, Lakshmi Mittal expressed the hope that he would clinch the deal  in three months.

HT Image
HT Image

He said, “I am confident we will win,” on BBC Five Live’s Weekend Business programme. “At the end of the day, shareholders will  make the right decision… and we should be completing the merger before the end  of June.” He said, “Since it was announced, the  transaction has created value of more than 7.5 billion euro for  shareholders in both companies (through the rise in stock prices)”. He has criticised Arcelor’s prospects saying “They are not in the higher-growth market which is central and eastern Europe. They do not have the vertical integration, they do not have access to cheaper raw material… Plus, their strategy on stainless steel has failed.”

Mittal also voiced his concern over the reported move by the Luxembourg Chamber of Commerce to enact a law that would preclude any company with less public ownership from launching a share based offer for another group. It is known that Mittal Steel, a Dutch company, 88 per cent is owned by the Mittal family. It would thus fall below that threshold proposed by the Chamber of Commerce.

“I am really worried  about the obstacles that Arcelor’s management are confronting me with,” he told the media.

His comments significantly was made as it emerged that Luxembourg’s Trade Minister Jeannot Krecke would visit India to discuss the bid with Commerce  Minister Kamal Nath. Luxembourg knows that India is alarmed at the hostile  reaction among European politicians to Mittal’s  offer.

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